Phase 4: Redesign

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What is the Redesign Phase?

The fourth phase, the Redesign Phase, is a step-change from the Align Phase in multiple ways. The work of the Redesign phase is to engage in high-impact redesign efforts, and to seed and spread disruptive innovations that alter organizations in fundamental ways. Because this phase requires organizational leaders to alter current business models, to change core practices and cultures, and to design reward systems to provide incentives for new behavior, it represents a qualitative shift from prior activities for all participants, and in the system itself.

Progress in the previous Phase 3 occurs and accelerates through the activities of independent stakeholders making incremental shifts in their priorities over time toward shared goals and measurements. By contrast, Redesign Phase activities require discontinuous change in organizational strategies, and a redeployment of their core competencies. Like most discontinuous change efforts, the impetus for radically rethinking business models may come not from inside local organizations but from pressures outside the health sector and the geographic region—such as changes in the policy environment or initiatives of governmental entities to promote regional development beyond health and health care.

Through our work with stewardship groups across the country, we have observed that leaders face a barrier when they try to move beyond aligning efforts around shared goals (Phase 3) toward whole-scale redesign and integration of the forces that support health and well-being in their regions (Phases 4 and 5). Too often, we have seen that a group’s enthusiasm wanes in the absence of sustained investment and when win-wins are no longer possible, making it harder to keep their effort going and growing. Discontinuous change is needed to mark a shift from innovations that accumulate on the margins to a new way of doing business.

Discontinuous change processes require:

a significantly different kind of internal organizational leadership from the stakeholders in the regional health system, as well as

stewardship structures that stimulate, guide, and promote genuinely transformative change. These two distinctions mean that the individuals and groups that guided change through Phase 3 may not be the same as stewardship structures of Phase 4 and beyond.

Leveraging Complexity and Increasing Innovation

Internal organizational leadership in the Redesign Phase requires more than willingness to shift priorities to a moderate degree in order to cooperate in promoting system-wide aims. It requires the vision and determination to re-conceptualize business models and to partner with other organizations in new ways. Phase 4 leadership groups must address and promote the taking on of controversial matters that strike at the heart of old organizational practice—and they must address the subsequent changes in organizational independence and power to act autonomously.

In the Redesign Phase, multi-stakeholder stewardship forums therefore increase in complexity. While no single structural arrangement can address the stewardship needs of every regional context, certain common features of the stewardship structure are needed to address critical Phase 4 challenges. First, multiple groups may serve different stewardship functions that together promote transformative change. For example, councils may support dialogue among like organizations, for dealing with controversial matters within a sector—a hospital forum for addressing competitive capital investments, for example, or a convening of social services providers and community organizations for addressing capacity. These groups allow negotiation and cooperative agreements and promote the development and enforcement of new intra-sector norms and standards of conduct. While multiple leadership groups serve different purposes, the need for an overarching stewardship structure remains. Phase 4 efforts require a stewardship group that is committed to a system-wide vision and strategy.

While earlier phases of the Pathway can be largely about harvesting improvements that are the result of aligning stakeholders and their investments and priorities, Phase 4 absolutely requires experimentation that focuses on new designs, prototyping, and scaling disruptive innovations in place. These experiments must address how and where care is provided; how people are paid; the role of residents in their health and care; which policies shape vulnerability and opportunity; the ways the system will be funded; and how transparency, information-sharing, and impact evaluation will be conducted for the whole scope of the effort.

In one example, a local safety net health system and insurer exhibiting the unique characteristics of an entity participating in a Redesign Phase effort, Cambridge Health Alliance (CHA), experienced a significant change in state funding that threatened to put it out of business. Instead, CHA motivated its leaders to engage in a broadly inclusive, collective process to identify meaningful ways to restructure and focus on providing needed services to its community. CHA is now continually experimenting and testing new global payment and incentive models, ways to reduce hospitalizations and improve care transitions and access to primary care, and innovative approaches to reinvesting savings in a much broader scope of primary care and preventive services that impact health.

Council of Councils

For redesign efforts to bring about movement toward a system that produces radically better performance across multiple outcomes—health, cost, quality, equity, productivity—some forum must have the capacity for joint decision-making that articulates shared goals, deploys funding with legitimate authority, and holds members accountable to strongly shared norms across sectors. A successful Redesign Phase requires leaders’ recognition of the potential synergies that could be realized by redesigning key structural elements in response to external pressures. For example, leaders may perceive the impact of contingent global payments on efforts to improve care and reduce costs, the power of long-term upstream investments in the environment for radically reshaping what is possible in the health system, and other complex relationships that call for true redesign of the health economy of a region. The scope of initiatives and sources of funding in the Redesign Phase are broad, but guided by a system strategy that recognizes the interdependencies among parts of the health system.

An overarching stewardship group may be formed or composed by representatives from sector-specific councils, or it may arise from broadly aimed regional efforts that are given authority to convene and influence other groups. It can derive authorization to steer a regional health effort either through formal authority (e.g., a group of county-level elected officials, or a state-appointed coordinating body), or through the powerful informal authority that comes from being representative of all the key stakeholders and authorized by participating organizations. Regardless of how it is formed and authorized, such a stewardship structure must be viewed by organizations and residents as having the legitimate authority to set priorities and guide the investment of resources.

One example of a representative council is in Cincinnati, where collective impact processes focused on education and community development have been underway for years, and a new “Council of Councils” is helping to coordinate and integrate a new regional planning effort around community health. The purpose of the Council of Councils is to bring the various sectors together, helping both the long-established and recently established find common ground and learn to work together effectively.

Moving to the Redesign Phase

Moving to the fifth phase, the Integrate Phase, on the Pathway depends on whether the stewardship structure guiding the effort is prepared to make hard choices and affirm that organizations must redesign their current business models and hold members accountable to those standards. Transition to the Integrate Phase also depends on whether, in Phase 4, residents have been engaged in defining how the health system will be led in the future. Because Phase 5 involves the creation of collaborative long-term governance of the system, the activities of Phase 4 must result in a citizenry that is engaged and prepared to share responsibility for a long-term system vision and structure for making choices into the future.

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Common Pitfalls in the Redesign Phase

Political resistance. Hard choices need to be made—resistance escalates because all solutions are likely to create winners and losers.

Leaders mired in incremental change. Veteran leaders take very few risks, making only small changes to the status quo.